Implementing Health Reform. On February 5, 2016, the Centers for Medicare and Medicaid Services issued a guidance at its REGTAP.info recognizing a new special enrollment period (SEP), while the Departments of Labor, Treasury, and HHS issued a new guidance on student health plans.
New SEP For Those Who Failed To File Tax Returns Reconciling Advance Premium Tax Credits
Insurers have been sharply critical of SEPs in recent weeks, claiming that individuals who enroll through SEPS are unusually high cost and that SEP enrollees unbalance the risk pool. CMS has stated that it intends to tighten up on SEPs that might be subject to abuse. The agency retains statutory and regulatory authority, however, to recognize new SEPs where appropriate.
The new SEP recognized on February 5 is available for consumers who are without marketplace coverage because of their failure to file their taxes and reconcile advance premium tax credits (APTC) for 2014. The ACA provides that otherwise eligible individuals who enroll in qualified health plans through the marketplaces and have incomes between 100 and 400 percent of the federal poverty level are entitled to advance premium tax credits (APTC) based on their anticipated income. Those who have received APTC for a given year are required to file their taxes for that year and to reconcile the amount of APTC they received based on their projected income with the premium tax credits to which they were actually entitled given their actual income. Individuals who fail to do so are ineligible to receive premium tax credits for years following the year in which the tax filing was due until they file and reconcile for the year in which they received APTC.
APTC were first available for 2014. The 2015 tax filing season, therefore, was the first time individuals needed to file and reconcile. Those who failed to do so are ineligible for APTC for 2016 until they fulfill this obligation for 2014. Many of these individuals, however, may never have had to file taxes before and may not have been fully aware of this requirement. It may have first come to their attention when they realized that their coverage was being terminated for 2016 for failure to file for 2014. Since this is the first year in which this requirement has applied, CMS is granting a one-time SEP for affected individuals.
The new SEP gives individuals who:
- are not currently enrolled in 2016 coverage through the federally-facilitated marketplace,
- are not receiving APTC in 2016 because the IRS determined that they failed to file and reconcile for 2014, and
- subsequently file and reconcile their 2014 APTC and attest to having done so on their 2016 marketplace application,
the opportunity to enroll in coverage for 2016 by March 31, 2016. Their coverage will be effective as of the first day of the month following plan selection.
The SEP will not be necessary for individuals who have remained enrolled through the marketplace but who have lost APTC because of their failure to file and reconcile. These individuals may apply to the marketplace for an updated eligibility determination for 2016 once they file and reconcile for 2014 and may continue their coverage.
Premium Reduction Arrangements For Student Health Plans
The tri-agency guidance applies to premium reduction arrangements for student health plans. The three agencies have, beginning in 2013, issued a series of guidances regarding the application of the ACA's market reforms to employer payment plans (EPPs) and health reimbursement arrangements (HRAs).
The agencies have taken the position that EPPs and HRAs violate the ACA's market reform requirements if they are offered to pay for individual coverage rather than being integrated together with an ACA-compliant group health plan arrangement.
Universities often offer their students coverage through student health plans without charge or at a reduced rate. Student health insurance plans are a form of individual coverage. Where students are also employed by the school to do research or teaching the school may effectively be offering their student employees an EPP for individual coverage, which is prohibited by the 2013 tri-agency guidance.
Recognizing that the schools may not have understood that the 2013 guidance on employer coverage applied to them, the February 5 guidance provides that the agencies will not assert that a school's premium reduction arrangement violates the ACA for a transition period including plan or policy years beginning before January 1, 2017, encompassing academic year 2016-2017 coverage. Schools may, of course, cover their student employees through their own insured or self-insured group health plans, and may continue to assist non-employee students with coverage through student health plans and premium reduction arrangements.
from Health Affairs Blog http://ift.tt/1SACzL1
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